2010 (2) TMI 1006 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are related to the clearance of goods for export under bond without payment of duty, subsequent non-export of the goods, confiscation, payment of duty, interest on duty, and refund claim.

Issue 1: Clearance of goods for export and subsequent events
The Respondent, a manufacturer of bulk drugs, cleared a consignment for export under ARE-I without payment of duty. The consignment was not exported due to a case against the merchant exporter. The goods were seized, confiscated, and subsequently released to the Respondent on payment of duty. The Respondent filed a refund claim for the interest paid on duty, which was rejected by the Asstt. Commissioner.

Issue 2: Interpretation of Notification No. 42/2001-C.E. (N.T.)
The Commissioner (Appeals) allowed the refund claim, stating that the provisions of the notification regarding diversion for home consumption did not apply in this case as the goods were returned to the factory and then re-exported. The Revenue appealed against this order, arguing that the interest on duty should be paid as per the notification.

Judgment:
The Tribunal held that since the goods were initially cleared for export but not exported, treated as diverted for home consumption, and duty was paid, the interest provisions of the notification applied. The Tribunal noted that if the Respondent disagreed, they should have appealed the Commissioner (Appeals)'s order. As duty was demanded on the goods diverted for home consumption, interest on duty was correctly paid. Therefore, the order permitting the refund of interest was set aside, and the Revenue's appeal was allowed.